Brexit: Carney warns a chaotic Brexit could see house prices plunge

The Bank of England’s governor has warned the cabinet that a chaotic no-deal Brexit could crash house prices and send another financial shock through the economy.

Mark Carney met senior ministers on Thursday to discuss the risks of a disorderly exit from the EU.

His worst-case scenario was that house prices could fall as much as 35% over three years, a source told the BBC.

The comments are likely to spark anger amongst Brexiteers.

There were also widespread reports that the governor told the Downing Street meeting that mortgage rates could spiral, the pound and inflation could fall, and countless homeowners could be left in negative equity.

According to the Financial Times a source told the paper that all Mr Carney’s predictions were “grim” and “chilling”. The FT said the governor took questions from ministers, but there was no hostility.

That comment prompted leading Tory eurosceptic Jacob Rees-Mogg to call Mr Carney “the high priest of Project Fear”, while former minister Iain Duncan Smith said “there is no such thing as a no-deal” and the Bank “struggled to understand how this would work”.

Following the Downing Street meeting, the Prime Minister’s official spokesman said ministers remain confident of a Brexit deal, but agreed to “ramp up” their no-deal planning.

“As a responsible government, we need to plan for every eventuality. The Cabinet agreed that no-deal remains an unlikely but possible scenario in six months’ time,” the spokesman said.